Mistakes to Avoid While Trading Crypto
By Space Coast Daily // July 8, 2021
Making mistakes is essential for development. According to Sophia Loren;
Mistakes are part of the dues one pays for a full life.
People learn from the mistakes they make and avoid them in the future. For cryptocurrency trading it is almost impossible to avoid mistakes, some mistakes are more costly than others. Imagine losing thousands of dollars for a mistake you easily could have avoided, it is hard to recover from such mistakes.
I may agree with Sophia Loren that mistakes are essential for development, however, why make mistakes that you easily can avoid?
“Intelligence is the ability to learn from your mistakes. Wisdom is the ability to learn from the mistakes of others.” – Anonymous
Here are four mistakes to avoid while trading crypto.
Lack of fundamental analysis:
Most of us started trading by picking out the most enticing cryptocurrency in the market and start trading. Some of us were lucky and profit came in, but how long did it last? The story is the same, after a period of time the coin dumped like there’s no tomorrow, and before we know it, our portfolio turns red.
This is where fundamental analysis comes in, before we make any trade, it is important we ask the following questions:
How has the coin fared so far?
What does this coin do?
Does it have a prospect?
Who makes up the team?
The answers to the following questions above will go a long way to determine whether or not you can go ahead with the crypto.
Trading without apt knowledge
Crypto trading is easy, anybody anywhere in the world can pick up his mobile phone and start trading any time of the day. Trading is for everybody but should everybody trade?
The market is a little bit tricky, and only people who know how to navigate through can profit. For starters, in platforms like Bitcoin code, before making your first trade, you need to be sure that you can manage the market.
Start by getting resources. There are some helpful trading courses online, ebooks, and blog posts (just like this) that will come in handy.
Even if you are already trading and getting some profit, it doesn’t mean you have apt knowledge of trading; only when you fully understand the market can you make your profit sustainable.
I am sure you have heard the phrase “Don’t put all your eggs in one basket” over and over again. Nevertheless, you cannot underestimate the power of the cliche. Over the years, it remains an important investment strategy.
Investing in multiple ventures reduces risk. For instance, in the cryptocurrency world, you cannot outrightly predict the potential of a particular coin. Some may propose flawless whitepaper backed with an experienced team, yet the project would still fail. That’s why the best way of trading crypto is to diversify your capital. If few fail, others may succeed.
Even if you are sure of a particular project, it is essential that you still diversify; losses hurt less when you have more variety.
Don’t follow the bandwagon.
Once you type crypto on google, you will find numerous resources promising different trade suggestions; there are also numerous forums, influencers, and telegram groups where ideas fly around.
While it is good to learn from fellow traders like you, it is also essential to match your drum’s beat. There are times when the market seems to be tumbling, and everyone around you is panic selling; there’s going to be pressure n you also to sell. Moments like this are when you need to look within and make decisions devoid of external pressure.